February 22, 2012

How the mighty have fallen

The great companies of my youth have all fallen by the wayside, often ignominiously. DEC was the superstar computer company for computer geeks when I was in college. It eventually was bought by Compaq, who in turn was acquired by HP, and HP's own future is no longer secure.

My first job was with Tektronix, then an independent company. 4 years ago it got bought by Danaher, a company I've never even heard of. But according to Wikipedia, Danaher also owns Fluke.

Sun Microsystems -- remember them? Purchased by Oracle, of all people. What does a software company that makes databases need with a hardware company?

National Semiconductor; back in the day, during the years when the industry hadn't yet standardized on the x86 CPU, there were a lot of companies coming up with rival CPUs. One of the best was National's 16016 and its successor the 32032. It was a very clean architecture, very orthogonal. And it went nowhere, and I never understood why. Last year National got acquired by Texas Instruments.

And now? I just read that Google is in the process of acquiring Motorola. That's really quite a shock. Google? Good Grief.

How long before PepsiCo acquires IBM?

Posted by: Steven Den Beste in Weird World at 08:08 AM | Comments (16) | Add Comment
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1 Not sure if your questions are rhetorical.

Oracle bought Sun primarily for Java. In the same transaction they also snatched Solaris, MySQL, and OpenOffice. They wanted Solaris in order to provide an integrated OS stack under their database and application suite, which was completely proprietary. This was especially acute for them as their clone of Red Hat Enterprise Linux was a dramatic failure. MySQL was also hurting them badly.

IBM spun off a lot of their hardware business after the "rebirth". Not just little known divisious like hard drives. I am writing this on a Lenovo T400. I don't think anyone is going to buy the rest any time soon though. On the contrary, they are likely to buy what's left of HP.

Posted by: Pete Zaitcev at February 22, 2012 09:59 AM (G2mwb)

2 During the height of Microsoft's power, when everybody and their dog was accusing them of being an unstoppable monopoly, Bill Gates said something to the effect that no company had ever held the top spot through two revolutionary sea-changes in the same industry, and that if MS worked very hard, and was very lucky, they *might* become the first.

They didn't.  In fact, their play into the ultrabook/tablet market this fall may be their last chance to recover that position.  Sure, they may have the most PC OS sales for decades to come, but if the PC market shrinks and fades away in a transition to convergence devices, what good does that do them?

I do give Wintel a pretty decent chance of pulling off a comeback, but MS cannot afford another Vista (or worse, ME), or there'll be another big-name brand on your list in our lifetimes.  Intel, I think, has a stronger hand on their side, and may surprise the ARM market in a few years.

Posted by: BigD at February 22, 2012 11:06 AM (qLkdZ)

3

Microsoft has spent the last ten years desperately trying to diversify, and pretty much entirely failed. They've been trying to get into pocket computers and/or phones for most of that time -- remember WinCE? They tried to challenge for the game console business, and while XBox is competitive it hasn't taken over the business. And then there was MSNBC. And they tried to challenge for the portable music player market. They also tried to compete with AOL, and they continue to this day to try to compete with Google.

The desktop PC isn't going anywhere any time soon, so Microsoft isn't facing extinction, but it's hard to see what they bring to any other table. About the best they've ever done in any of those was to turn into a stable also-ran. They're #2 behind Google with Bing. They're #2 behind Sony with XBox. They're probably #3 behind Apple with their MP3 player, whatever it was called. WinPhone is losing to Android. And so on.

As to HP, that company doesn't deserve that name. The HP I know (and that I competed against when I worked at Tektronix) is now called Agilent, and it really should have gotten the HP name, leaving the other part to be called Compaq, because that's what was left. No thank you, Carly Fiorina.

Posted by: Steven Den Beste at February 22, 2012 11:40 AM (+rSRq)

4 Wait.. Somebody named a product that wasn't pepper spray WinCE?

Bing...Bing...Bing...Oh.

Posted by: The Brickmuppet at February 22, 2012 01:38 PM (EJaOX)

5 The potential transition of everything to phone/tablets/etc has huge potential for impact on my industry, so we've been watching it and trying to figure out our strategy of what platform to support, how strongly, when, etc.  It's interesting to see that pretty much everyone agrees that from an OS perspective, Windows7 phone is far superior to the Android or iOS systems, and yet there is little to no market penetration.  The previews of Windows 8 indicate that it's going to be quite amazing, but lots of people are unsure if the hardware pipeline is going to drag Microsoft down to failure again.  As much as many of us techies have despised the closed Apple platform, it does help them in circumstances like this.  And I suspect that's the driver behind Google looking at Motorola, the Motorola phones are already more or less the 'official' droids, and it makes a certain amount of sense to tighten that up even further.

I have to disagree with your statement that MS is behind Sony with the XBox.  They're ahead in worldwide sales, and the developers and buzz all seem to on the XBox side, and have been for some time.  Only in Japan does the PS/3 still dominate, and the trend even there is that the XBox360 is finally being taken seriously and is selling in large numbers.  And the WII actually blows them both away in terms of worldwide and Japanese sales numbers.

Posted by: David at February 22, 2012 02:45 PM (+yn5x)

6 XBox Kinect was revolutionary in expanding the market, in ways Wii Fit only dreamt about. What they lack is a gaming portable.

Posted by: Pete Zaitcev at February 22, 2012 03:04 PM (G2mwb)

7 The interesting parts of Motorola were mostly already spun off into Freescale; Google are buying Motorola Mobility, just the cell phone division.  And I expect that's mostly for the patent portfolio, given the way lawsuits have been flying around recently.

Posted by: Pixy Misa at February 22, 2012 03:05 PM (PiXy!)

8

Microsoft has hooked up with Nokia, which has announced that all its phones will use WinPhone from now on. Nokia has fallen on hard times recently. Time was when they were the brand to beat in the phone business, but it ain't like that now, and Android is a lot of the reason why.

So maybe that partnership will be a win for both companies.

But with WinPhone, Microsoft's big problem is that Google is giving Android away for free. WinPhone can't be, else there would be no point in Microsoft even bothering to do it.

Google's business strategy is to try to make internet access as common, as cheap, and as easy as possible. They're trying to make internet access devices into commodities, because the more people who are online, the more money Google makes from advertising.

So it actually makes sense for them to invest in Motorola's phone business, including picking up their patent portfolio. It doesn't make sense for them to use those patents to squeeze competitors, and I don't expect they will.

That's why they developed Android and then gave it away.

Posted by: Steven Den Beste at February 22, 2012 03:17 PM (+rSRq)

9 Google apparently did buy Motorolay Mobility at least partially for the patents--this gives them a chance at fighting some of Apple's ridiculous patents with some of their own.
Interestingly, apparently some of the Android phone makers, HTC at least, have licensed some Microsoft patents, and there's a theory out there that MS may actually be making more money on each individual Android phone than on each Windows Phone phone, at least from HTC.

Posted by: RickC at February 22, 2012 04:18 PM (/5bLf)

10

I can believe that Google wants to use Motorola's patents as a wedge to get MS and Apple to loosen up the licensing  on their respective portfolios of relevant patents.

That would make perfect sense.

Posted by: Steven Den Beste at February 22, 2012 04:22 PM (+rSRq)

11 Supplementary reading: this post by Joel Spolsky explains Google's business strategy. (Though it doesn't mention Google.)

Posted by: Steven Den Beste at February 22, 2012 05:06 PM (+rSRq)

12  Microsoft's video gaming division has been a very big success. The only reason why Sony is ahead in the gaming console market in general is the huge sales of the Playstation 2 before the launch of the original XBox.

Microsoft is Number 2 in the current game console generation behind Nintendo. Sony lags behind both. That Sony has any large share of the video game market came despite their efforts, not because of them. With the exception of the price cuts for the PS3 and PSP (Which came far too late in the game.), every move Sony has made in its gaming division of this generation has required at least one failed attempt before they made the right decision. Meanwhile Microsoft has taken the lead in online gaming for consoles, which is not an insignificant achievement. Outside of Japan, Sony's share in the gaming industry is a distinctly underwhelming third.

If anything, it is easier to argue Microsoft is mostly where it wants to be in the console market.

Posted by: cxt217 at February 22, 2012 05:22 PM (47Cgj)

13

I guess my knowledge of that market was out of date.

I do know that the primary goal of the PS3 for Sony was to get Bluray players in as many hands as possible. Anything they may have lost in the gaming industry, they've more than made up by killing off the HD-DVD format and making Bluray the new standard for video discs.

Posted by: Steven Den Beste at February 22, 2012 05:37 PM (+rSRq)

14 Nintendo may have the sales lead in the console market right now, but they have also backed themselves into a corner somewhat.  The Wii has sold such numbers in part by hitting the new "casual" market hard.  This has made them money, certainly, especially since they sold the Wii at above cost from day one.  However, they have more or less saturated the market, and its not at all clear whether they can actually sell a successor console to the people who bought the Wii to play Wii Sports or such.

As for Sony. . . I suspect your right, and they placed winning the format war above all else.  However, they screwed themselves when they decided to drop backward compatibility from the PS3.  Everyone else learned the lesson of the PS2, but Sony either didn't, or felt they had no choice.

Posted by: metaphysician at February 22, 2012 08:57 PM (3GCAl)

15

The touting of the PS3 being used to push Blu-Ray always struck me as a case of Sony using the success of a lesser goal for the PS3 to divert attention from the failure of the console system at beating the XBox 360.  Given Sony's (continual) confusion in its remarks about whether the PS3, as well as the PSP, are gaming systems or entertainment units...I tend to be skeptical of what Sony actually wanted to achieve.

And we have not even gotten into the mistakes Sony apparently has not learned from yet, like PS2 backwards compatibility...

 

Posted by: cxt217 at February 22, 2012 09:14 PM (47Cgj)

16 Sony certainly seemed to mis-step somewhere with Blu-Ray.  It has completely failed to stamp out DVDs, the way that DVDs wiped out VHS and laserdisc.  With up-converting DVD players, and the rise of streaming or mobile video, people just aren't willing to shell out extra for 10x the capacity... and Hollywood's tomfoolery seems to have killed the blank BR market, allowing HD and flash to dominate.

I don't know that Kinect will make MS a fortune (probably depends on the patents), but it certainly stands to make *some* folks working in garages a pile of money, especially when it comes out for PCs with a full dev kit.  Forget Google's "nod and tilt" GUI--imagine a pair of glasses where you see transparent 3D buttons in front of you, and you put your finger on one to select it--or use Kinect-based voice recognition, which I hear isn't far behind Siri, if at all.  Or a projector filling a way with an interactive display, a la MS Surface.

Minority Report?  Where we're going, we don't need gloves.

Posted by: BigD at February 23, 2012 03:20 PM (qLkdZ)

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